ABSTRACT

The study empirically identified the determinants of Foreign Direct Investment (FDI) inflow to Nigeria. Secondary sources were used to source annual time series data on FDI inflow into Nigeria, Degree of trade openness, Gross Domestic Product (GDP), Interest rate, Exchange rate of the naira against the US Dollar (N/$),over the period, 1970 – 2011.These variables were analyzed using Ordinary least Square (OLS), Unit Root test, Co-integration and Error Correction Mechanism (ECM). It was found that there is a significant relationship between FDI and GDP, exchange rate and degree of openness but no significant relationship between FDI and interest rate in Nigeria. The study recommends among others, that Government should continuously formulate and implement policies that would increase productive base, embark on moderate devaluation of the national currency to attract more FDI inflow into Nigeria and encourage liberalization with some policy caution.